Algae Labs PVT.LTD. vs. State Tax Officer- I
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The petitioner, Algae Labs Pvt. Ltd., filed a writ petition challenging an order dated 11.03.2022 passed by the State Tax Officer-I, Adjudication. The respondent had demanded a sum of Rs.12,46,678/- (tax and penalty) and seized a vehicle bearing Registration No.RJ-06-GC-7978 along with its consignment. The seizure occurred because the consignee address mentioned in the invoice and e-way bill (No.5/150, South Karumpattor, South Thamaraikulam, Kanyakumari, Tamil Nadu – 629708) was not initially part of the petitioner's GST registration. The petitioner explained that this address was a rented premise used by a proprietary concern of one of its directors, and they subsequently amended their GST registration to include this address. The goods were a specialized spray dryer purchased from M/s.ABV Engineering, Ahmedabad.
Held
The Court held that both the petitioner and the respondent admitted that the address in question was subsequently included in the petitioner's GST registration. Considering this post facto inclusion, which matched the address on the tax invoice and e-way bill, the Court found no attempt to evade tax. The Court quashed the impugned order, drawing a parallel to a similar case (W.P.(MD)No.5720 of 2022) where relief was granted due to post facto amendment of GST registration. The Court was inclined to allow the writ petition. The operative direction was to quash the impugned order and release the vehicle and its consignment. No issue was expressly left undecided.
Key Issues
1. Whether the impugned order demanding tax and penalty under Section 129 of the respective GST Acts is sustainable when the consignee address, though not initially in the petitioner's GST registration, was subsequently included post facto, and there was no intention to evade tax? Petitioner's arguments: The petitioner contended that the transportation was accompanied by a tax invoice and an e-way bill, indicating sufferance of tax. They argued that there was no violation of Section 129 as there was no attempt to evade tax, especially since the address was later included in their GST registration. They relied on Circular No.10/2019 Q1/17253/2019 dated 31.05.2019. Respondent's arguments: The respondent argued that the consignee address was the business place of Tvl.Pinnacle Biosciences, which is in the same trade, and that this indicated an attempt to evade tax. They further submitted that Circular No.10/2019 was irrelevant to the present case.
Sections Cited
Section 129
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Before: and Shri Adhi Visvanathan,
After hearing the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent, this Writ Petition is disposed of. 2.In this Writ Petition, the petitioner has challenged the impugned order of demand of tax and penalty under Section 129 of the respective GST Acts. By the impugned order, the respondent has demanded a sum of Rs.12,46,678/- [Rs.6,23,339+Rs.6,23,339]. 3.The petitioner is a new start up company and is engaged in research and development on Alage and its utilization. The petitioner placed purchase order on 07.10.2021 for supply of a 1/3 https://hcservices.ecourts.gov.in/hcservices/ specialized spray dryer and the parts thereof with M/s.ABV Engineering, Ahmedabad, who had consigned the same along with the invoice bearing No.197/21-22, dated 28.02.2022. The goods also accompanied with E-way Bill. As per the invoice, the name and address of the Consignee read as under: ''Algae Labs Private Limited, 5/150, South Karumpattor, South Thamaraikulam, Kanyakumari, Tamilnadu - 629708'' 4.The vehicle along with spray dryer were seized by the respondent on the ground that the address of the Consignee mentioned as No.5/150, South Karumpattor, South Thamaraikulam, Kanyakumari, Tamil Nadu – 629708, was not a place mentioned in the GST Registration of the petitioner. 5.The learned counsel for the petitioner submits that the petitioner has entered into a rental agreement with one of the Directors of the petitioner Company, who is running a Proprietary concern at the said premises called ''Tvl.Pinnacle Biosciences'' and the above said premise has been taken on rent by the petitioner. Post facto the petitioner has also amended GST Registration by including the address at No.5/150, South Karumpattor, South Thamaraikulam, Kanyakumari, Tamil Nadu – 629708 in the GST Registration. 6.The learned counsel for the petitioner submits that there is no violation of Section 129 of the respective GST enactments as the transportation by the supplier from Gujarat not only accompanied tax invoice, but also E-way Bill showing sufferance of tax to the goods transported from Gujarat to the petitioner. It is therefore submitted that the impugned order is not sustainable. The learned counsel for the petitioner has also drawn the attention of this Court to Circular No.10/2019 Q1/17253/2019, dated 31.05.2019, issued by the Commissioner of Commercial Taxes. 7.Opposing the prayer, the learned Additional Government Pleader for the respondent submits that the registration profile of the petitioner reveals that one M.Adhi Visvanathan is the Director of the petitioner concern and also the Proprietor of Tvl.Pinnacle Biosciences, having address at No.5/150, South Karumpattor, South Thamaraikulam, Kanyakumari, Tamil Nadu – 629708. It is submitted that the place of delivery of the consignment is the business place of Tvl.Pinnacle Biosciences, who is also in the same trade and thus, there is an attempt to evade tax. It is further submitted that the attempt was to clear the goods to the said said Tvl.Pinnacle Biosciences and therefore, the impugned order cannot be interfered. 8.It is further submitted that the reliance placed by the petitioner on Circular No.10/2019 Q1/17253/2019, dated 31.05.2019, 2/3 https://hcservices.ecourts.gov.in/hcservices/ is of no relevance. 9.I have heard the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent and perused the impugned order and Circular No.10/2019 Q1/17253/2019, dated 31.05.2019. 10.Both the petitioner and the respondent admit that as on date the above said address has been included in the petitioner's place of business in the GST Registration. Thus, there is a post facto inclusion of the address, which was mentioned in the tax invoice raised by the supplier and in the E-way Bill. 11.Considering the above fact, I am inclined to quash the impugned order, as there is no attempt to evade tax. Incidentally, in W.P.(MD)No.5720 of 2022 [M/S.Smart Roofing Private Limited, Tax Officer (Int), Adjudication-II, Madeira], an order came to be passed under a some what similar circumstances on 30.03.2022. There also, post facto GST Registration was amended and relief was therefore granted. The facts of the present case and the facts of the above said case are not different. Considering the same, I am inclined to allow this Writ Petition. 11.Accordingly, this Writ Petition is allowed. No costs. Consequently, connected Miscellaneous Petition is closed. Assistant Registrar (W) //// / /2022 Sub Assistant Registrar(CS) To The State Tax Officer-I, Adjudication, CTO Building Complex, AR Lane Road, Palayamkottai, Tirunelveli – 627 002. +1 CC to M/s.SPL GP,SR.No. 16675 WP (MD) No.4958 of 2022 04.04.2022
NSN(CO) KB(12.04.2022) 3P 3C 3/3 https://hcservices.ecourts.gov.in/hcservices/
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.